The price of Bitcoin (BTC) had a relatively moderate day, with digital assets trading between $ 8,700 and $ 8,885.
Currently, the price remains below the ascending trend line and the daily candle has closed as a neutral doji, showing that bulls and bears are vying for the direction Bitcoin will take in the short term.
Weekly crypto market price table. Source: Coin360
As the price seeks direction and its dominance rate drops from 67% to 65.5%, a handful of altcoins have continued a streak of impressive double-digit rallies over several days.
Despite the price of Bitcoin which is struggling to recover $ 9000 and enter the ascending channel, Cointelegraph reported that the majority of Binance’s best traders remain long on the highest ranked digital asset on CoinMarketCap and a number of large cap altcoins.
Investor Sentiment Strikes
Interestingly, data from TheTIE, an alternative cryptocurrency-focused data provider, shows that investors are increasingly bearish about the short-term price outlook for the price of Bitcoin.
Daily sentiment score vs price (BTC). Source: TheTie
As the chart above shows, over the past week, the drop in Bitcoin prices has been a drop in sentiment. TheTIE defines the Daily Sentiment Score as “a measure of how positive or negative conversations on Twitter have focused on a particular room in the past 24 hours compared to the last 20 days.” A score below 50 means that conversations are becoming more and more negative. ”
Previous analysis by Cointelegraph revealed the relationship between the volume of tweets, mentions of Bitcoin, trading volumes and spot prices, therefore keeping a gauge on social activity related to crypto is a practice only to many crypto investors find it useful.
Crypto Fear and Greed Index. Source: Alternative.me
The Crypto Fear & Greed Index, another popular Bitcoin sentiment metric traders generally cross-trades, also shows a sharp drop in bullish investor sentiment. Currently, the indicator says “Fear” and stands at 39, a sharp drop from the “Neutral” reading of 50 last week.
Last week, as the price of Bitcoin rebounded repeatedly on the rising channel trend line, investors felt some confidence in the digital asset guaranteeing a close above $ 9,300 as the channel had provided solid support for more than two months. But, once the price closed last week under the channel, the bullish sentiment went down.
Closure above 20-MA is required
Although it remains below the ascending channel and $ 9,000, the price of Bitcoin is starting to climb higher daily lows and the MACD histogram suggests a decrease in bearish momentum.
Even if the recovery of the handful of $ 9,000 would be a positive development, the price is now trading below the long-term decreasing trend line from the 2020 peak at $ 10,500. A more encouraging sign would be that the price is closing above the 20-day moving average at $ 9,240.
USD BTC daily chart. Source: TradingView
In the past few days, $ 9,000 and $ 9,100 have been resistance levels prices are struggling to overcome and the price has fallen below 20-MA since the drop of $ 9,800 on May 20.
Currently, the price is coming back to around $ 8,900 and a push above $ 8,950 would open the door to a quick drop to $ 9,100, but resistance at this level and $ 9,200 could lead to a rapid rejection.
A number of traders also consider $ 9,300 as a possible level of resistance to open shorts, therefore entry at the current price does not seem to offer an attractive risk reward.
1 hour BTC USDT chart. Source: TradingView
There is also a head and shoulders pattern on the one hour delay, which means that repeated releases at $ 8,880 could lead to the completion of the right shoulder and drop the price below the support at $ 8,700.
As mentioned earlier, the price of Bitcoin is now showing higher lows on the daily 4-hour chart and buyers bought the recent declines at $ 8,700. For brokers, traders can monitor a 4-hour close above $ 9,000 and $ 9,100 to see if the price can stay above either level.
In the event that Bitcoin falls below $ 8,700, the visible range of the volume profile displays $ 8,550 as the last level of support before the price can drop to $ 7,700 – $ 7,450.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Each investment and trading movement involves risks. You have to do your own research when you make a decision.